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SCOTUS Just Decided a Sovereign Immunity Case That May Come Back to Haunt Someone Other Than China


The U.S. Supreme Court on Monday ruled that a little-known terrorism exception to the Foreign Sovereign Immunities Act (FSIA) retroactively applies to state-sponsored conduct–and therefore allows for plaintiffs to recover certain punitive damages.

While Monday’s decision will pay no dividends to the current crop of lawsuits against China in the wake of the coronavirus pandemic, the unanimous Opati opinion could potentially open the floodgates for increased litigation aimed at another highly controversial U.S. ally–who just so happens to be one of the world’s foremost state-sponsors of terrorism: the Kingdom of Saudi Arabia.

Stylized as Opati v. Republic of Sudan, the relatively concise opinion was delivered unanimously and penned by Justice Neil Gorsuch. Justice Brett Kavanaugh took no part in the case. He recused himself simply for previously serving on part of a lower court panel that rejected a request for the case to be reheard en banc.

The facts of the case are fairly straightforward. In 1998, al Qaeda operatives attacked two U.S. embassies in Africa–killing hundreds of people and maiming thousands more. Investigations pointed to the government of Sudan as complicit in those attacks and a series of lawsuits filed by the injured and the families of the dead ensued.

A district court availed those findings on the legal record:

After a consolidated bench trial in which Sudan declined to participate, the district court entered judgment in favor of the plaintiffs. District Judge John Bates offered detailed factual findings explaining that Sudan had knowingly served as a safe haven near the two United States Embassies and allowed al Qaeda to plan and train for the attacks. The court also found that Sudan had provided hundreds of Sudanese passports to al Qaeda, allowed al Qaeda operatives to travel over the Sudan-Kenya border without restriction, and permitted the passage of weapons and money to supply al Qaeda’s cell in Kenya.

Judge Bates then had to consider what the plaintiffs were entitled to recover from the Sudanese government in lieu of their court-identified support for al Qaeda’s attacks in Kenya and Tanzania.

“Over more than two years, [seven] Special Masters conducted individual damages assessments and submitted written reports,” Gorsuch’s tidy, 12-page opinion notes. “Based on these reports, and after adding a substantial amount of prejudgment interest to account for the many years of delay, the district court awarded a total of approximately $10.2 billion in damages, including roughly $4.3 billion in punitive damages.”

At that point, however, Sudan finally took note of the case and appeared in court to avail itself of the U.S. legal system–which makes it extremely difficult for foreign governments to be sued for anything as long as they bother to contest the proceedings.

How so? The legal doctrine of sovereign immunity, fully codified into federal law in 1976 via the FSIA, offers foreign governments a suite of protections against lawsuits in U.S. courts.

The FSIA has been in the news as of late due to several high-profile lawsuits filed against China by red states and conservative activists over the country’s alleged–and unproven–role in negligently “unleashing” the novel Coronavirus (COVID-19) and the conspiracy theory that China deployed the deadly virus into a “bioweapon.”

None of those lawsuits have a serious chance of success and the principles of sovereign equality and sovereign immunity will almost assuredly mean those publicity-focused filings are as dead as a door nail.

Some of the most common and utilized exceptions to the FSIA concern commercial activity and trade, but over the course of various amendments dating back to 1996, the U.S. Congress specifically amended the FSIA to include a terrorism exception–eventually extending a limited grant of retroactive application in 2008.

Sudan argued that Congress had not created a new form of liability for any past conduct via the 2008 FSIA amendment and similarly that Congress “nowhere clearly authorized punitive damages for anything countries like Sudan might have done in the 1990s.”

In basic terms, the issue was that congressional amendments to the longstanding rule of international law that prevents such lawsuits–here carved out in FSIA’s terrorism section–were just too unclear for the plaintiffs to recover. In other words: the 2008 statute did not contain explicit language that made punitive damages, in particular, available for retroactive lawsuits about state-sponsored terror.

The D.C. Circuit Court of Appeals agreed with Sudan but the eight justices on the Supreme Court clearly disagreed.

“Congress proceeded in two equally evident steps,” Gorsuch’s opinion notes. “(1) It expressly authorized punitive damages under a new cause of action; and (2) it explicitly made that new cause of action available to remedy certain past acts of terrorism. Neither step presents any ambiguity.”

A longer–and less clear–explanation delves into the statutory details:

Congress was as clear as it could have been when it authorized plaintiffs to seek and win punitive damages for past conduct using §1065A(c)’s new federal cause of action. After all, in §1083(a), Congress created a federal cause of action that expressly allows suits for damages that “may include economic damages, solatium, pain and suffering, and punitive damages.” (Emphasis added.) This new cause of action was housed in a new provision of the U. S. Code, 28 U. S. C. §1605A, to which the FSIA’s usual prohibition on punitive damages does not apply. Then, in §§1083(c)(2) and (c)(3) of the very same statute, Congress allowed certain plaintiffs in “Prior Actions” and “Related Actions” to invoke the new federal cause of action in §1605A. Both provisions specifically authorized new claims for preenactment conduct.

The nation’s high court ruled that punitive damages are, in fact, available for the family members and victims of Sudan’s complicity in the al Qaeda attacks. The case was remanded back to the D.C. Circuit which must now reconsider its ruling on both federal and state punitive damages–which were denied using similar logic.

[image via SAUL LOEB/AFP via Getty Images]

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